Clackamas County Economic Landscape Emerging Trends Update June 2015 update

1

Clackamas County’s Economic Contribution Regional (9 county) GDP = $165 Billion per year (2013) down from $183 B in 2012 but up from $132 B in 2011

Clackamas County GDP = $18.1 Billion Flat from $18.1 B in 2012 and up from $16.4 B in 2011 Source: IMPLAN model.

2

Definitions • • •

• • • •

IMPLAN = IMPact for PLANining (economic input/output model) IMPLAN Sectors: up to 536 detailed industry or commodity types (i.e., sector #6, Greenhouse, Nursery & Floriculture Production) NAICS: North American Industrial Classification System; industry classification system utilized by Oregon Employment Dept. and US Bureau of Labor Stats. Employment: IMPLAN includes full and part-time job estimates; Oregon Emp. Dept. estimates “covered employment” with reported unemployment insurance Direct vs. Secondary Employment: see following graphic Employee Compensation: IMPLAN includes total payroll costs, labor income, and benefits. Oregon Emp. Dept. estimates labor income/payroll only. Traded Clusters or Traded Sectors: industries that derive the majority of sales from outside the PMSA.

3

Definitions •

•

•

Location Quotient: propensity of the industry to be produced in Clackamas County vs. the PMSA (9 county) region. A LQ of 1.0 means that the cluster propensity to locate in Clackamas County is equal to the average for the entire 9-county region. Gross Domestic Product (GDP) or Valued Added: annual contribution of an industry, measured by employee compensation, proprietor income, other income and tax payments Output: annual gross sales less ending year inventory and depreciation

4

Understanding LQs • Location Quotients – Propensity of jobs to locate in Clackamas County in comparison to the entire Regional PMSA. – Reflects relative size and growth based on 10-yr. job growth forecast and direct wages paid. – Four categories: Stars, Emerging, Mature and Challenged.

Low LQ

Emerging

LQ

High LQ

Stars

High

Proj. Growth rate

Challenged

Mature Low

5

Understanding Impacts using IMPLAN Indirect Impacts

Direct Impacts

(backward

linkages) (supply-chain inputs, such as utilities, supplies, parts, materials, transport. and vender services)

Direct spending by employers (production cost, direct employee compensation, tax & fee payments)

Induced Impacts (forward linkages)

(household consumption spending)

6

What Defines Key Cluster? • Location Quotient > 1 or approaching 1 – Greater presence within Clackamas County relative to the region – Concentration of similar businesses & supply chains – Increasing propensity to locate in Clackamas County

• Strong Economic Contribution – Key clusters account for about 50% of county GDP

7

Clackamas County Key Clusters* •

• • • • • • • • • •

Professional Business Services – Corp. HQ, legal, insurance, engineering, finance (excl. banking, advertising) High Tech Manufacturing & Software Wholesale Trade Health Care Advanced Manufacturing – Metals – includes primary & fabricated metals and machinery mfg. Film & Media Production Transportation & Distribution Agriculture & Food Production Food & Beverage Processing Nurseries and Greenhouses Wood Manufacturing

* Shown in order of annual GDP contribution to Clackamas County

8

Other Defined Clusters • Leisure, Hospitality and Tourism: Large level of employment but relatively low wages /output; spread among many sectors (e.g., retail, entertainment, lodging, etc.) County continues to develop tourism in related efforts. • Natural Resources and Mining – low location quotient in County. • Retail: Serves local population; lower wages & economic output, and is part of tourism cluster. • Construction: Primarily serves local population and job growth; not usually considered as a traded sector (but could be emerging as one). • Education – Important for workforce development and serving local population; but not currently a major traded sector.

9

Clackamas County’s Clusters • Key Clusters in Clackamas County:

Distribution of Annual GDP ($10.5 Billion)

 Create $10.5 billion in direct annual GDP  Generates 56% of total direct GDP in County  Employ 45% of the Job base  Avg. covered payroll of $47,000 in key clusters is over 17% above county average

Source: FCS GROUP based on 2013 IMPLAN data

10

Clackamas County Clusters: Annual Direct GDP (millions) Overall GDP stayed flat between 2012 and 2013, with some clusters leading the way. Fastest GDP growth occurring in: Film & Media, Advanced Manufacturing – Metals & Machinery and Agriculture and Food Production. * Source: IMPLAN data, adjusted to 2015 dollars.

11

Clackamas County Clusters: Average Compensation Levels*

Avg. Emp. Compensation fell slightly between 2012 and 2013.

Avg. Comp. in Clackamas County was 20% below Region

Most key clusters pay above average compensation * Source: IMPLAN; adjusted to 2015 dollars. Note, IMPLAN calculates employment compensation based on total payroll and benefits divided by covered and noncovered employment; which is different than average payroll calculated by Oregon Employment Dept based on covered workers and reported payrolls.

12

Wholesale Trade 2013 Impacts Indirect Impacts

Direct Impacts Clackamas County

Regional

Induced Impacts Regional

5,777 jobs $464 M in GDP

5,872 jobs $421 M in GDP

11,753 jobs $1,522 M in GDP

Total Impact on Region: 23,402 jobs; $2,407 M in GDP 13

Wholesale Trade* • • • • • •

Good rebound in 2013 Avg. compensation: $69,977 Employment: 11,753 Annual GDP: $1.5 billion LQ steady and “mature” 11 firms in County Top 100 (Kroger, Sysco, Pacific Sea Food, Orepac Building Products, etc.)

Annual Economic Output by Location * Includes firms, agents and brokers engaged in sale of goods to retailers.

Source: FCS GROUP & Real Urban Geographics based on IMPLAN and Oregon Employment Dept. data.

14

High Tech, 2013 Impacts Indirect Impacts

Direct Impacts Clackamas County

Regional

4,868 jobs $393 M in GDP

Induced Impacts Regional

(production cost, direct employee compensation, tax & fee payments)

5,090 jobs $364 M in GDP

8,163 jobs $2,499 M in GDP

Total Impact on Region: 18,121 jobs; $3,256 M in GDP 15

High Tech* • • • • • •

Strong GDP growth but lagging in jobs Avg. compensation: $80,596 Employment: 8,163 Annual GDP: $2.5 billion LQ has decreased 7 firms in County Top 100 (Xerox, TYCO Electronics, Flir Systems, Johnson Controls, Rockwell Collins)

• Emerging Opportunities: computer components, audio/video equip., battery mfg., and wire & cable mfg.

* Includes manufacturing of computer parts and electronic devices, software design, and computer systems programming.

Annual Economic Output by Location Source: FCS GROUP & Real Urban Geographics based on IMPLAN and Oregon Employment Dept. data

16

Advanced Mfg. – Metals & Machinery 2013 Impacts Indirect Impacts

Direct Impacts Clackamas County

Regional

3,749 jobs $305 M in GDP

Induced Impacts Regional

(production cost, direct employee compensation, tax & fee payments)

3,748 jobs $269 M in GDP

7,566 jobs $695 M in GDP

Total Impact on Region: 15,063 jobs; $1,269 M in GDP 17

Advanced Mfg. – Metals & Machinery* • • • • • • •

Recent job and GDP growth Avg. compensation: $69,230 Employment: 7,566 Annual GDP: $695 million LQ still very high 2 firms in County Top 100 (PCC Structurals, Oregon Iron Works, Growth areas: cutlery, handtools, metal tanks and specialty coatings

Annual Economic Output by Location * Includes primary metals, fabricated metals, machinery manufacturing.

Source: FCS GROUP & Real Urban Geographics based on IMPLAN and Oregon Employment Dept. data

18

Professional Business Services 2013 Impacts Indirect Impacts

Direct Impacts Clackamas County

Regional

16,872 jobs $1,148 M in GDP

Induced Impacts Regional

(production cost, direct employee compensation, tax & fee payments)

9,951 jobs $712 M in GDP

36,132 jobs $3,154 M in GDP

Total Impact on Region: 62,955 jobs; $5,014 M in GDP 19

Professional Business Services* • • • • • •

Significant job growth in recent years Avg. compensation: $27,675 Employment: 36,123 Annual GDP: $3.2 billion LQ holding steady 3 firms in County Top 100 (Alpine Mortgage, Huron Consulting, Princeton Property Mgmt..)

* Includes legal, eng., accounting, marketing, insurance, sales, real estate, computer systems; excludes commercial banking

Annual Economic Output by Location Source: FCS GROUP & Real Urban Geographics based on IMPLAN and Oregon Employment Dept. data

20

Nurseries & Greenhouses 2013 Impacts Indirect Impacts

Direct Impacts Clackamas County

Regional

Induced Impacts Regional

552 jobs $22 M in GDP

562 jobs $40 M in GDP

4,231 jobs $136 M in GDP

Total Impact on Region: 5,345 jobs; $198 M in GDP 21

Nurseries and Greenhouses • • • • • •

• •

Very hard hit by recession and still struggling Avg. compensation: 37,786 Employment: 2,013 Annual GDP: $136 million Mature industry with stable LQ 2 firm in County Top 100 (Leo Gentry Wholesale, Early Morning LLC) Primarily rural impacts Legal hemp/marijuana may help this cluster Annual Economic Output by Location Source: FCS GROUP & Real Urban Geographics based on IMPLAN and Oregon Employment Dept. data.

* Includes production of landscaping trees, shrubs and seedlings, herbs, flowers and related products. 22

Trucking & Distribution 2013 Impacts Indirect Impacts

Direct Impacts Clackamas County

Regional

1,407 jobs $106 M in GDP

Induced Impacts Regional

(production cost, direct employee compensation, tax & fee payments)

1,531 jobs $109 M in GDP

4,295 jobs $288 M in GDP

Total Impact on Region: 7,233 jobs; $503 M in GDP 23

Trucking & Distribution* • Recorded best year since recession in 2013 • Avg. compensation: $40,774 Employment: 4,259 • Annual GDP down: $288 million • LQ holding steady “mature” • 4 firms in County Top 100 (Interstate Distributor Co, Safeway Dist. Center, Rite Aid Dist. Center, Gordon Trucking etc.) * Includes trucking, warehousing and storage businesses

Annual Economic Output by Location Source: FCS GROUP & Real Urban Geographics based on IMPLAN and Oregon Employment Dept. data

24

Food & Beverage Processing 2013 Impacts Indirect Impacts

Direct Impacts Clackamas County

Regional

Induced Impacts Regional

1,185 jobs $91 M in GDP

857 jobs $61 M in GDP

1,984 jobs $162 M in GDP

Total Impact on Region: 4,026 jobs; $314 M in GDP 25

Food & Beverage Processing* • 2013 was record year for this Cluster in Clackamas County • Avg. compensation: $57,523 • Employment: 1,984 • Annual GDP: $162 million • LQ still “challenged” • 1 firms in County Top 100 (Bob’s Red Mill Natural Foods, Nature Bake)

• Opportunities: animal food, and snack food manufacturing

Annual Economic Output by Location * Includes food processing and beverage manufacturing businesses.

Source: FCS GROUP & Real Urban Geographics based on IMPLAN and Oregon Employment Dept. data

26

Agriculture & Food Production 2013 Impacts Indirect Impacts

Direct Impacts Clackamas County

Regional

511 jobs $30 M in GDP

Induced Impacts Regional

5,346 jobs $167 M in GDP

662 jobs $47 M in GDP

Total Impact on Region: 6,519 jobs; $244 M in GDP 27

Agriculture and Food Production* • 2013 set a two-decade record for jobs and GDP in this Cluster • Employment: 5,346 • Average Compensation: $17,129 • GDP: $167 million • LQ is trending up • Major concentrations in rural areas. Important rural and urban interface

Annual Economic Output by Location *Includes agriculture and animal production for food and medicinal purpose, and support activities. 28

Wood Product Manufacturing 2013 Impacts Indirect Impacts

Direct Impacts Clackamas County

Regional

Induced Impacts Regional

421 jobs $37 M in GDP

438 jobs $31 M in GDP

720 jobs $75 M in GDP

Total Impact on MSA: 1,579 jobs; $143 M in GDP 29

Wood Product Manufacturing* • • • • • •

Cluster still struggling Avg. compensation: 53,927 Employment: 720 Annual GDP: $75 million Mature industry with shrinking LQ 1 firm in County Top 100 (Boise Cascade Company) • Primarily rural impacts

Annual Economic Output by Location * Includes firms making products, such as trusses, cabinets, wood furniture, etc.

Source: FCS GROUP & Real Urban Geographics based on IMPLA and Oregon Employment Dept. data.

30

Health Care, 2013 Impacts Indirect Impacts

Direct Impacts Clackamas County

MSA

3,777 jobs $293 M in GDP

Induced Impacts MSA

(production cost, direct employee compensation, tax & fee payments)

6,449 jobs $462 M in GDP

13,514 jobs $1,263 M in GDP

Total Impact on Region: 23,740 jobs; $2,018 M in GDP 31

Health Care* • 2013 set a record in jobs for this Cluster in Clackamas County • Avg. compensation: $71,009 • Employment: 13,541 • Annual GDP: $1.3 billion • Increasing LQ (still a “star”) • 8 firms in County Top 100 (American Medical Response, Legacy Meridian Park Hospital, NW Permanente, Providence Hospital, Sunnyside Hospital, etc.) • Opportunity to intercept trade outflow *includes hospitals, offices of physicians, dentists, and home health care professionals

Annual Economic Output by Location Source: FCS GROUP & Real Urban Geographics based on IMPLAN and Oregon Employment Dept. data.

32

Film & Media Production 2013 Impacts Indirect Impacts

Direct Impacts Clackamas County

Regional

Induced Impacts Regional

3,047 jobs $203 M in GDP

4,999 jobs total (335 in film only) $437 M in GDP total

1,787 jobs $128 M in GDP

Total Impact on MSA: 9,833 jobs; $768 M in GDP

Film & Media Production • Includes publishers, motion picture and video industries, broadcasting, advertising, photography, arts/sports agents/promoters and independent artists and performers. • Record GDP contribution within this Cluster in 2013 • 2 firms in top 100 (Waggener Edstrom, Autodesk Inc.) • Top 10 firms in sector account for about 70% of payroll in cluster • Top 10 (ranked by payroll): Waggener Edstrom (marketing, LO) Dark Horse Publishing, (Milwaukie) AEC, Inc. (publishing, Sandy) Oregon Publications (Milwaukie) Chevalier Advertising (Lake Oswego) Pamplin Broadcasting (Milwaukie) Pacific Marketing & Broadcasting (Milwaukie) KPDQ AM & FM (Milwaukie) Hot Off the Press (Canby) Pacific Coast Crewing (film prod. in Boring)

Annual Economic Output by Location 34

Employment Areas: Job metrics (Jobs per Developed Acre)

• Jobs per acre increasing in Kruse Way only • However, not much “jobs ready” vacant land exists currently • Most of the remaining vacant employment land supply is “challenged”

Source: FCS GROUP based on data from the Oregon Employment Department data.

35

Employment Areas: GDP metrics (GDP in Millions per Acre)

• GDP per acre increased in East Wilsonville and Kruse Way; and fell in other areas, between 2011 and 2013. • Nike Campus and Ronler Acres are regional pace setters Source: FCS GROUP based on data from the Oregon Employment Department and IMPLAN

36

Employment Areas: AV metrics (Assessed Valuation in Millions per Acre)

• AV per acre in Clackamas County still highest in Kruse Way • AV per acre in Region highest at Ronler Acres • Relatively low utilization rates in North Milwaukie and Clackamas Ind. Area • Consider strategies to enhance employment in older industrial areas Source: FCS GROUP based on data from the Oregon Employment Department and IMPLAN;

37

Portland Region (9 counties)

$165 Billion GDP; 471 IMPLAN sectors

Criteria

Clackamas County $18.1 Billion GDP; 351 IMPLAN sectors

Process for Focusing on Targeted Industries in Clackamas County 2015 update

Key Clusters $10.3 Billion GDP; 11 clusters; 252 IMPLAN sectors

Key Traded Clusters

7 Clusters: Ag.; Food Processing; Metals; High Tech; Wholesale Trade; Nurseries; Wood Mfg. 209 IMPLAN sectors

Target Businesses

•LQ > 0.9 •Clusters make up at least 50% of “GDP” in County •At least 1 firm in “Top 100” (with exception of Wood Product Mfg.) •LQ > 1.0 •Inter-Regional Exports” account for 50%+ of trade in sector •Foreign Exports >$100,000 in sector •Over 10 workers/firm •Pay above National median wage •Above avg. job growth in sector since 2009 •Plus “Top” employers* *excludes retail, hotels, banks, congregate care and non-profits.

Strategies 1. Target fast growing gazelle firms that are locally owned Stage II businesses (10-100 workers) in key clusters that meet criteria 2. Devise retention strategies for large firms (500+ workers) and export growth strategies for Stage II businesses (firms with 10 to 100 workers). 3. Create “Jobs ready” employment sites needed in urban and rural areas 4. Monitor workforce training in line with changing business needs

39

For additional information please contact: Clackamas County Business & Economic Development Department 503-742-4329

40